New Jersey’s public sector bubble bursts

New Jersey’s unemployment report[2] released yesterday showed the impact of lawmakers’ decision to hold the line on tax increases and live within our means. And it isn’t pretty.

The state lost a whopping 21,200 jobs. More than 14,000 of those jobs were in the local government sector – municipalities, counties and schools. And the state’s nonfarm employment plummeted to its lowest level since 1998.

Call it the bursting of the public sector bubble.

It’s no consolation for the thousands of workers who have lost their jobs, but as Rutgers University economist James Hughes noted yesterday, the state’s economy is re-balancing. During the decade of the 2000s, the private sector lost 156,100 jobs, while the public sector added 69,400 jobs.

Fortunately for me, you don’t have to be a math major to figure out what that means. It means residents, who are struggling to get by, need to pay more and more taxes to support the ever expanding public sector – and all of the pension and health care benefits that public sector jobs offer.

Unless the private sector suddenly added 225,500 jobs – or twice the number of private sector jobs added from January 1990 to December 1999 – the equation wasn’t going to work. The ax eventually was going to fall – despite the federal government’s stimulus packages designed to soften the blow.

Of course, it sounds much better in theory than in practice. In theory, it is a step we have to take. In practice, real people are losing their jobs and are cast off into a labor market where private-sector jobs are scarce. Not for nothing, but New Jersey’s private sector lost more than 3,000 jobs in July and isn’t keeping pace with the rest of the nation, Hughes pointed out yesterday.

No one expects the economy to turn around swiftly. I take that back. Lately, it seems like everyone expects the economy to turn around swiftly, particularly with election season approaching. It’s lunacy.

But maybe that’s a good thing, too. President Obama has been touring the country touting clean energy businesses that could be the Next Big Thing. Gov. Christie is doing the same thing in Paulsboro, Gloucester County, today.[3] No taxpayer stimulus, no tax refunds for buying a home, no borrowing from investors without advising them about the condition of an unsustainable pension plan. Just hard work.